Has Microsoft Lost Its Spark (Once More)?

Did you dive into the coding agent hype last November like everyone else?

It was a whirlwind for tech enthusiasts. I spent considerable time engaging with coding agents over the holiday season, and it’s been an exhilarating journey since.

Claude Code seems to have stolen the spotlight, surpassing both Codex and Copilot. Just a few years back, Microsoft’s Copilot was leading the charge. Now, it’s all about Claude Code.

I would have to disagree respectfully. While coding models play a role, Microsoft remains a fantastic environment for developers. Windows offers an open platform on accessible hardware that allows creativity to flourish.

Microsoft aims for Scout to be embraced by productivity users and everyday consumers. However, AI agents are prone to errors and hallucinations. How many mistakes are users willing to accept?

That’s a valid question. I’m not entirely sure. Trust, but check it. Start with a small task, assess its performance, and if it succeeds, consider granting read-only access to something. For instance, when I mention that I’ve given OpenClaw access to my blood sugar data as a type 1 diabetic, the immediate reaction is often, “How could you let an agent access your health information?” But for me, receiving proactive alerts about my blood sugar is incredibly valuable. I don’t see that as controversial.

I understand, but there are many who are currently skeptical or even hostile toward AI.

Whenever a new tool is launched—be it a chainsaw, a power tool, or the internal combustion engine—there’s a phase of chaos as people learn to harness it for human benefit. Personally, I’m not fully on board with AI; I vote with my actions. I don’t utilize AI for image or video generation because I don’t believe in those areas, but I do enjoy using AI for coding.

Yes, coders are enthusiastic about agents, but there’s resistance outside of that circle. Microsoft has witnessed this through the underperformance of its AI productivity tools. Are you expecting similar challenges with agentic AI?

People will either embrace it or not. I remember the Walkman being introduced, and there were naysayers claiming, “No one will wear those ridiculous headphones.” Now, we all walk around with those white earbuds in.

Do you think Microsoft is in a catch-up position?

I would kindly disagree and suggest that everyone is in a catch-up game; progress ebbs and flows. It’s like a thumb war. Remember, Microsoft was the first to use the term “Copilot,” and now it’s synonymous with the concept.

Do you believe this year’s developer conference has reestablished Microsoft in the competition?

I had a couple of Mac users with me backstage who witnessed the announcement of the Surface Laptop Ultra and the new developer tools. They looked at us begrudgingly and said, “Dang it, you’re going to make me get a Surface, aren’t you?”

Are there now a lot of MacBook Airs ending up in the trash at Fort Mason?

That would be quite the outcome, though I’d hate to contribute to more electronic waste.

This is an edition of Steven Levy’s Backchannel newsletter. Read previous newsletters here.